Durban rates increases hit hard

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Copy of ND CONSUMER (43034301) DAILY NEWS Dhaaramradh Yubraj, an unemployed widower who lives with his two sons and their wives in a two-bedroom semi-detached house in Chatsworth, said the municipal hikes which came into effect this week would hit them hard. Picture: Puri Devjee

Durban - When his next eThekwini municipal rates bill arrives at the end of this month, Dhaaramradh Yubraj, 57, will brace for some financial pain.

“I just don’t know what I am going to do,” he said on Wednesday.

With electricity costs going up by 7.4 percent, water by 9.9 percent, rates by 6.9 percent and sewage and refuse removal by 7.9 percent – all coming into effect this week – Yubraj fears his family will not be able to make ends meet.

The unemployed widower, who lives with his two sons and their wives and a grandchild in a two-bedroom semi-detached house in Chatsworth, said the municipal hikes, all above inflation, would be a hard pill to swallow.

“There are six of us staying in this house and already we are living day by day, hand to mouth. Who can afford such increases?” Yubraj said his municipal bill, which included rates, ranged from R1 000 to R1 400 a month.

“With these increases it will probably add another R100 to R200 on that bill. My eldest son is the only one who works and the rest of us do odd jobs. We are going to be hit hard.”

Economists agreed that the municipal increases, coupled with the 29 cent hike in the price of petrol this week, would be felt by consumers.

The eThekwini Municipality has also slapped businesses with a 12.9 percent rates increase, which economists believe will be passed on to consumers.

Cees Bruggemans, an economist with Bruggemans and Associates, said the municipal hikes came at a time when people’s “real income” was shrinking.

“Salaries, wages, bonuses and overtime pay for the majority of people are increasing at a rate of between 7 to 8 percent. But the price of goods and services are actually increasing at higher percentages,” he said.

“This is having a knock-on effect on the entire economy in terms of people’s spending as they will be more cautious as to what they buy.”

Gloom

A slowdown in spending would have an effect on the manufacturing and retail sectors. Coupled with the strike by the National Union of Metalworkers of South Africa, it could spell more gloom for consumers, Bruggemans said.

“This is a time for people to be cautious because it affects the entire economy.

“That salary increase you are expecting or that bonus you were depending on at the end of the year may not come because companies are going to also be cautious.”

Dawie Roodt, an economist with the Efficient Group, agreed.

“The worrying thing about the increases is that they are all above inflation, which in turn could – although I don’t believe so – lead South Africa into recession.

“While the (eThekwini) municipality may think that increasing business rates by 12.9 percent is fair, they fail to realise that every business will pass that increase on to the consumer. So in a sense that in itself is shortsighted.”

For Yubraj and his family the increases will mean they will have to cut back even further on certain food items.

“I don’t know how much tighter we can go, but we are going to have to see.

“It is hard already. Where else (to cut)? One less loaf of bread a day? Maybe not buy milk? I don’t know.”

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